80R6021 JD-D

By: Nichols S.B. No. 575

A BILL TO BE ENTITLED

AN ACT

relating to limitations on increases in the appraised value of a residence homestead for ad valorem taxation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 23.23, Tax Code, is amended by amending Subsection (a) and adding Subsection (g) to read as follows:

(a) Except as provided by Subsection (g), the [The] appraised value of a residence homestead for a tax year may not exceed the lesser of:

(1) the market value of the property; or

(2) the sum of:

(A) five [10] percent of the appraised value of the property for the last year in which the property was appraised for taxation times the number of years since the property was last appraised;

(B) the appraised value of the property for the last year in which the property was appraised; and

(C) the market value of all new improvements to the property.

(g) The commissioners court of a county may call an election in the county to permit the voters of the county to determine whether a percentage limitation on increases in appraised value determined in the manner provided by Subsection (a)(2) using a percentage that is greater than the percentage specified by Subsection (a)(2)(A) but not more than 10 percent will apply to the taxation of residence homesteads in the county by each taxing unit having territory in the county. The election shall be held on the date of the next general election for state and county officers. The ballot proposition shall specify the proposed percentage limitation on increases in appraised value. If a majority of the votes cast at the election do not favor the establishment of the proposed limitation, a subsequent election under this subsection may not be held before the 10th year after the year in which the election is held. If a majority of the votes cast at the election favor the establishment of the proposed limitation, the limitation applies beginning with the tax year following the year in which the election is held and remains in effect until amended or repealed by the voters of the county at a subsequent election called by the commissioners court of the county. An election to amend or repeal the limitation may not be held before the 10th year after the year in which the proposition establishing the limitation was approved by the voters. If the voters of a county amend or repeal a limitation, the amendment or repeal applies beginning with the tax year after the year in which the election is held.

SECTION 2. Section 42.26(d), Tax Code, is amended to read as follows:

(d) For purposes of this section, the value of the property subject to the suit and the value of a comparable property or sample property that is used for comparison must be the market value determined by the appraisal district when the property is a residence homestead subject to a [the] limitation on appraised value imposed by or established under Section 23.23.

SECTION 3. This Act applies only to the appraisal of residence homesteads for ad valorem tax purposes for a tax year that begins on or after January 1, 2008.

SECTION 4. This Act takes effect January 1, 2008, but only if the constitutional amendment proposed by the 80th Legislature, Regular Session, 2007, authorizing the legislature to limit the maximum average annual increase in the appraised value of residence homesteads for ad valorem tax purposes to five percent or less and to permit the voters of a county to establish a higher limitation not to exceed 10 percent on increases for residence homesteads in the county is approved by the voters. If that amendment is not approved by the voters, this Act has no effect.